6. In the absence of evidence you can be taxed on their estimates of what they believe you should be earning!

I know – it sounds mad – but HMRC use these powers every day: let’s say that you are a self employed plumber and you declare 15K a year.

HMRC may look at your lifestyle (the car you run and mortgage you pay) and think your out-goings are suspiciously high.

HMRC consider trades – like plumbing – high risk and they use the retail price index figures to calculate estimates for income.

They can turn around and say, we think a plumber of your age and ability should be earning an average of £200 per day. We are going to assume that you have been earning that amount and not declaring it.

HMRC will then tax the plumber (scaling the figures back over five years) and adding high penalties for non-disclosure of income.

The burden of proof is in the taxpayer, but it’s very difficult prove a negative. HMRC simply send out a bill for a huge figure.

The callous use of these powers causes bankruptcy, repossession and in some tragic cases suicide.